According to data released by Japan's Ministry of Economy, Trade and Industry, industrial production dropped by 2% in February (year-on-year), against expectations of 2.6% and following January's 2.6% drop. In yearly terms, industrial production fell by 1.3% in February, better than the previous month's 2.1% drop and expectations of a 2.1% drop.
Japanese production capacity fell 2.8% in February, lower than expectations of a 3.2% expansion and below the previous month's 3.2% gains.
According to the Ministry of Finance, exports rose by 16.1% in March, its highest monthly gain since November 2017, and an improvement from expectations of 11.6%.
Those gains are mostly attributed to the fact that shipments to China, Japan's most important trading partner, rose by 37.2% annualized. In contrast, shipping to the United States remained subdued, gaining 4.9% year-on-year.
Imports rose by 5.7% annualized, over expectations of 4.7%. The trade surplus stood at $6.11 billion dollars (around 663.7 billion yen), higher than forecasts of a 490.0 billion yen surplus.
It seems that exports levels have been slowing in the first quarter, while external demand is unlikely to contribute to growth this year.
"The rebound in exports slowed significantly across Q1 and external demand is unlikely to provide much of a tailwind to growth this year," commented an analyst at Capital Economics. "The impressive annual figure was down to base effects from the weakness in exports in March 2020.”
The Japanese government is now trying to advance its vaccination campaign in an attempt to stop the spread of the virus. The vaccine minister recently announced that Pfizer is intending to increase the supply of its COVID-19 shots, which would allow the Asian country to get enough dosages to immunize all of its population by September.
The number of infections has been rising, which has pushed the government to increase restrictions, including travel, in places like Tokyo. Since the beginning of the pandemic, 529,829 coronavirus cases have been reported, as well as 9,622 deaths.